BYJU'S fires employees via calls in new wave of layoffs
BYJU'S, a prominent edtech firm, has initiated a new round of layoffs affecting an estimated 100 to 500 employees, primarily in the sales department, as reported by Moneycontrol. The company has been dismissing employees via phone calls, bypassing the usual process of implementing a performance improvement plan (PIP) or requiring a notice period. This move comes as BYJU'S faces significant financial difficulties, having already laid off over 10,000 employees in the past two years.
BYJU'S confirms layoffs amid business restructuring
A spokesperson for BYJU'S confirmed the layoffs, stating that the company is in the final stages of a business restructuring exercise announced in October 2023. The restructuring aims to simplify operating structures, reduce costs and improve cash flow management. The spokesperson also acknowledged the strain caused by ongoing legal issues and admitted that "every employee and the ecosystem itself is going through tremendous stress given the present circumstances."
Employees receive termination notices without clarity
Employees have reported receiving phone calls from HR informing them of their immediate termination. Following these calls, an email was sent confirming their last working day and instructing them to hand over all company assets. However, these communications reportedly lack clarity on when pending dues will be paid or why employees are being dismissed without a performance improvement plan (PIP).
BYJU'S faces cash shortage; delays salary payments
Currently grappling with a severe cash shortage, BYJU'S has been delaying salary payments for several months. The company has attributed its financial troubles to "foreign investors" after they secured an interim order restricting usage of funds raised through a recent rights issue. In an email to employees, the company stated that it was exploring a parallel line of credit to make sure salaries are paid by April 8.
Legal challenges surround BYJU'S $200 million rights issue
Investors including Prosus NV, General Atlantic, Sofina, and Peak XV Partners have posed legal challenges against BYJU'S $200-million rights issue at a 99% discount to the firm's peak valuation of $22 billion. The National Company Law Tribunal (NCLT) directed BYJU'S to keep the proceeds from the rights issue in a separate escrow account, and not withdraw the funds till the disposal of the suit filed by these investors.